Equinix's Q2 AFFO Beat Estimates on Strong Demand & xScale Fees

EQIX Recurring Revenues Rise Across Regions

Recurring revenues reached $2.38 billion, up 10.9% from the prior-year quarter. Non-recurring revenues more than doubled to $248 million from $113 million, reflecting the benefit of xScale leasing activity.

Americas’ revenues rose 24.6% year over year to $1.25 billion, with recurring revenues increasing to $1.07 billion. EMEA revenues advanced 10.2% to $845 million, while Asia-Pacific revenues grew 9.1% to $529 million. Normalized and constant-currency monthly recurring revenues increased across all three regions.

EQIX Posts Record Platform Activity

Customer demand remained broad-based as the company delivered its second-highest quarterly bookings volume on record. Presales activity increased more than 50% year over year, contributing to a record backlog and improving visibility into future revenue growth.

Equinix added a record 9,700 net interconnections during the second quarter. Monthly recurring revenues increased 11% year over year on both an as-reported and normalized constant-currency basis.

EQIX Expands Margins on xScale Fees

Adjusted EBITDA climbed 23.6% year over year to $1.40 billion. The adjusted EBITDA margin expanded to a record 53% from 50% in the prior-year quarter, aided by operating execution and one-time xScale fees.

Operating income increased 34.6% to $665 million. The cost of revenues increased 13.5% to $1.23 billion, but revenue growth outpaced the rise.

EQIX Accelerates Capacity Investment

Total capital expenditures were $1.58 billion, up from $989 million in the prior-year quarter. Non-recurring expenditures totaled $1.53 billion, including $1.37 billion directed toward IBX data center expansion.

The company had 52 projects underway across 33 markets and accelerated more than 7,000 cabinets previously scheduled for 2027 into the fourth quarter of 2026. Major project openings included facilities in Silicon Valley, Madrid and Milan. More than 85% of retail expansion spending is tied to owned land and owned buildings with long-term ground leases.

EQIX Maintains a Growth-Focused Balance Sheet

Equinix ended June with $979 million in cash and cash equivalents and $1.25 billion in short-term investments. Available liquidity totaled $7.7 billion, including undrawn revolving credit capacity.

The company reported total gross debt of roughly $22 billion and a net leverage ratio of 3.6 times. During the period, Equinix issued Canadian-dollar notes due in 2030 and 2035 and repaid $700 million of U.S.-dollar notes due in May 2026.

EQIX Raises 2026 & Long-Term Outlook

For the third quarter, management guided revenues to $2.525-$2.575 billion, implying a 10-12% increase year over year. Adjusted EBITDA is expected in the range of $1.275-$1.315 billion, with a margin of 51%.

For 2026, Equinix now expects revenues of $10.205-$10.285 billion, up from the previously guided range of $10.144-$10.244 billion. Adjusted EBITDA is projected between $5.210 billion and $5.270 billion, with a margin of approximately 51%.

AFFO per share is expected between $42.69 and $43.29, up from the prior guidance range of $42.31-$43.11. The Zacks Consensus Estimate of $43.05 lies within the range.

Management also raised its 2027-2029 outlook. Annual revenue growth is now expected between 10% and 13% compared with the prior range of 7-10%. Annual AFFO per-share growth is projected at 9-12%, while the adjusted EBITDA margin is expected to exceed 53% by 2029.

EQIX’s Zacks Rank

Equinix carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

SL Green Realty Corp. SLG reported second-quarter 2026 FFO per share of $1.43, which beat the Zacks Consensus Estimate of $1.19 by 20.17%. However, the metric declined 12.3% from $1.63 in the year-ago quarter.

Net rental revenues of $171.85 million surpassed the consensus estimate of $171.48 million by 0.22% and increased 16.5% year over year. SLG’s results reflected stronger Manhattan leasing, higher occupancy and growth in same-store cash net operating income.

Crown Castle Inc. CCI reported second-quarter 2026 AFFO per share of $1.13, up 10.8% year over year. The metric surpassed the Zacks Consensus Estimate of $1.00 by 13%.

Results reflected a rise in AFFO per share, driven by a decrease in interest expense and an increase in interest income resulting from the use of proceeds from the sale of CCI’s Fiber and Small Cell businesses.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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